=Puma Biotechnology (PBYI): FDA to review the company's breast cancer drug, neratinib

• Company's shares are down 80% from their Sept. 2014 peak.

An advisory panel for the Food and Drug Administration will review the company's breast cancer drug, neratinib, at a half-day meeting Wednesday morning. Today, the FDA staff posted briefing documents that will be used by the experts on the panel as the basis for discussion. They don't look as bad as investors who are bearish on the stock expected.

The FDA brought up several issues in the documents that could be deal-killers.

Puma's not applying to sell neratinib in patients who have no other hope. Instead, it's asking to sell the drug for use in women who have already had their cancer surgically removed, and who have also been treated with Herceptin, a Roche breast cancer drug, to keep it from coming back. Then they would take neratinib (tentative brand name: Nerlynx) to further lower their risk of breast cancer returning. In a big clinical trial, it neratinib reduced the rate of breast cancer recurrence within two years by a third. Cancer returned in 8.1% of women who didn't take neratinib, versus 5.8% who did.

Out of 100 women treated for two years, two would not get cancer. That's a real but small benefit -- although it might be bigger in a subset of women whose tumors test as hormone-receptor positive. But neratinib came with a downside: diarrhea in 95% of patients. For 40% of patients, the diarrhea was serious. It appears treatment with loperamide, the active treatment in Imodium, can reduce the diarrhea some.

Other drugs have been approved for use after a cancer appears to be gone (called "adjuvant use" by doctors), and more are coming. A study of Roche's breast cancer drug Perjeta that will become available after the expert panel votes, but before the FDA is expected to make a decision on neratinib. 

The biggest issue raised by the FDA documents is whether the many changes that were made to the neratinib study affected the statistical validity of the result. These results were so concerning that in March 2016, when Puma approached the FDA to talk about filing a new drug application for neratinib, the FDA advised the company not to do so. The opinions of a well-known statistician, Ralph D'Agostino, who will serve on the FDA's expert panel will be key here.